Issue

Many people on benefits believe that the financial risks of moving into work are too great. For some, the gains from work, particularly if they work part-time, are small, and any gain can easily be cancelled out by costs such as transport.

The government believes that:

the current system is too complex

there are insufficient incentives to encourage people on benefits to start paid work or increase their hours

We are aiming to:

make the benefit system fairer and more affordable

reduce poverty, worklessness and welfare dependency

reduce levels of fraud and error

Actions

We are reforming the welfare system to help more people to move into and progress in work, while supporting the most vulnerable.

Introducing Universal Credit

We began to introduce Universal Credit in 2013. It brings together a range of working-age benefits into a single payment. Universal Credit will:

encourage people on benefits to start paid work or increase their hours by making sure work pays

make it easier for people to manage the move into work

simplify the system, making it easier for people to understand, and easier and cheaper for the government to administer

reduce the number of people who are in work but still living in poverty

reduce fraud and error

Introducing Personal Independence Payment

We introduced a new benefit called Personal Independence Payment (PIP) from 8 April 2013. It will eventually replace Disability Living Allowance (DLA) for people aged 16 to 64. PIP helps towards some of the extra costs because of a long term ill-health condition or disability. It’s based on how a person’s condition affects them, not the condition they have. It’s designed to be a more sustainable benefit and make sure support continues to reach those who face the greatest challenges to taking part in everyday life.

DLA was introduced in 1992 for children and adults who need help with personal care or mobility. It had not been fundamentally reviewed or reformed since. There was confusion about the purpose of the benefit, it was complex to claim and there was no systematic way of checking that awards remain correct.

Introducing the Jobseeker’s Allowance Claimant Commitment

We have introduced a new Claimant Commitment that outlines what jobseeking actions a claimant must carry out while receiving Jobseeker’s Allowance. The Claimant Commitment brings Jobseeker’s Allowance into line with claimants’ responsibilities under Universal Credit.

Introducing a cap on the amount of benefits working age people can receive

In 2013 we introduced a cap on the total amount of benefits that most people aged 16 to 64 can receive. This means that households on certain benefits can no longer receive more in benefits than the average wage for working families.

Reassessing incapacity benefits claimants for Employment and Support Allowance

Employment and Support Allowance (ESA) replaced a range of incapacity benefits in 2008 for claimants making a new claim because of illness or incapacity.

From October 2010, those people who are still receiving the older style incapacity benefits are being reassessed and moved to ESA or other benefits more appropriate to their circumstances. This will continue until 2014.

Improving the Work Capability Assessment

Anyone claiming ESA will have a Work Capability Assessment to assess their capability for work. To ensure that the Work Capability Assessment is as fair and accurate as possible, we are continuing to review and improve it.

Making sure housing support is fair and affordable

We are creating a fairer approach to the way we pay housing costs to help bring stability to the housing market and improve incentives for people to find work or increase their hours.

From April 2013 we have introduced new rules for the size of accommodation that Housing Benefit, and then Universal Credit, will cover for working age tenants renting in the social housing sector. This makes the rules consistent with those that apply to tenants renting in the private rented sector.

In September 2014, the government asked SSAC to consider proposals that certain Universal Credit claimants must wait 7 days before they are entitled to benefit. SSAC are consulting on these proposals from 19 September 2014 to 17 October 2014.

Jobseeker’s Allowance or Employment and Support Allowance consultations

In April 2014, the government asked SSAC consider its proposals to extend from 3 to 7 the number of days a claimant must wait before they are entitled to get Jobseeker’s Allowance or Employment and Support Allowance. SSAC ran a consultation on these proposals from 23 May 2014 to 13 June 2014. It published its independent report on 4 September.

When Universal Credit starts

April 2013 – start of Universal Credit pathfinder

Starting in April 2013, DWP, with our delivery partners in HMRC and local authorities, is introducing Universal Credit for claimants within certain areas of the north-west of England.

October 2013 – introduction of Universal Credit

We will introduce Universal Credit in a managed way, progressively rolling it out nationally from October 2013. The transition from the current system of benefits and tax credits to Universal Credit will be gradual and it is expected to be completed by the end of 2017.

Additional support for Universal Credit claimants

Giving evidence at the Work and Pensions Select Committee on 17 September 2012, Ministers announced 3 additional areas of support for Universal Credit claimants.

Help with budgeting

DWP will explore the feasibility of new types of bank accounts or other financial products to help benefit claimants budget and manage their money. These financial products could help make sure people’s essential bills are covered – helping them to build up their credit rating and break the cycle of financial exclusion.

Supported accommodation housing costs

Help towards housing costs for those living in supported housing that satisfies our definition of ‘exempt accommodation’ will be provided separately from Universal Credit. DWP wants to continue to provide a flexible system to help meet the higher costs often associated with providing supported accommodation.

Supported accommodation is:

a resettlement place

accommodation provided by a county council, housing association, registered charity or voluntary organisation where that body or person acting on their behalf provides the claimant with care, support or supervision

Self-employment start up period

We recognise the need for claimants who are setting up a business to be given time to establish themselves and find sources of support. Therefore where a claimant has been self-employed for less than 12 months, a start up period will be granted.

This means that claimants will not be required to look for work or satisfy requirements to be available for work, and we will not assume a minimum level of income from self-employment (known as the ‘Minimum Income Floor’). This will give them time to concentrate on developing their business.

Claimants will be allowed a new start up period every 5 years rather than once in their lifetime.

Help for claimants who may need extra support claiming Universal Credit

On 11 February 2013 we published the ‘Universal Credit local support services framework’. The framework will be put in place for the introduction of Universal Credit from October 2013 to help claimants who may need extra support claiming Universal Credit. It explains:

who may need help

what services they may need

how these services will be provided through locally developed partnerships

The framework was developed following careful and intensive working between DWP and colleagues in the Local Government Association, Convention of Scottish Local Authorities and Welsh Local Government Associations with input from local authority representatives.

We invited feedback on the framework and published a summary of the responses on 2 August 2013.

Evaluation framework

On 10 December 2012 we published an evaluation framework for Universal Credit. The framework sets out our broad intentions for the evaluation of Universal Credit, highlights the main aims and objectives of the evaluation and considers possible analytical approaches.

Providing information about Universal Credit

We have published information about Universal Credit for claimants. They can find out if they are eligible and what they need to do to get ready for Universal Credit.

The toolkit contains information that will help these organisations to explain the changes that Universal Credit will bring for their customers. It includes a range of information products that can be printed off and shared and brand guidelines to help you create your own materials.

Appendix 2: introducing a cap on the amount of benefits working age people can receive

This was a supporting detail page of the main policy document.

From April 2013 we introduced a cap on the total amount of benefits that working age people can receive. Households on working age benefits can no longer receive more in benefits than the average wage for working families.

The cap can be applied through Housing Benefit payments or Universal Credit. These arrangements will continue until Universal Credit is fully in place and the cap from Housing Benefit is no longer required.

Benefits that are affected

The cap applies to the total amount that the people in a household get from the following benefits:

Bereavement Allowance

Carer’s Allowance

Child Benefit

Child Tax Credit

Employment and Support Allowance (unless the claimant is paid the support component as part of their award)

Guardian’s Allowance

Housing Benefit

Incapacity Benefit

Income Support

Jobseeker’s Allowance

Maternity Allowance

Severe Disablement Allowance

Universal Credit

Widowed Parent’s Allowance (or Widowed Mother’s Allowance or Widow’s Pension that started before 9 April 2001)

Who won’t be affected

In recognition of the additional needs that disability can bring, the cap will not
apply to households that include somebody receiving:

Disability Living Allowance

Personal Independence Payment

Industrial Injuries Benefit (and those receiving War Disablement Pension and the equivalent payments from the Armed Forces Compensation Payments Scheme)

Attendance Allowance

the support component of Employment Support Allowance

The cap will not apply to households entitled to Working Tax Credit, or the earnings equivalent under Universal Credit. This will increase the incentive for people on out-of-work benefits to find jobs because once they are receiving Working Tax Credit their benefits will no longer be capped.

It will not apply to war widows and widowers.

How much is the cap

Applied through Housing Benefit the cap is £500 a week for couples and single parent households and £350 a week for single adult households without children.

Applied through Universal Credit the cap is £2,167 a month for joint claimants and single claimants with children, and £1,517 a month for a single claimant with no dependent children.

Appendix 3: making sure housing support is fair and affordable

This was a supporting detail page of the main policy document.

We are creating a fairer approach to Housing Benefit to bring stability to the market and improve incentives to work.

Housing support under Universal Credit

Universal Credit is a new single payment that we are introducing for people who are looking for work or on a low income. It replaces a number of other benefits, including Housing Benefit.

Universal Credit will include an appropriate amount to help meet the costs of household rent or mortgage interest.

Changes to housing support in the social rented sector and the private rented sector

We have introduced new rules for the size of accommodation that Housing Benefit, and then Universal Credit, will cover for working age tenants renting in the social sector. This brings them in line with those renting in the private rented sector.

From April 2013 all current and future working age tenants renting from a local authority, housing association or other registered social landlord no longer receive help towards the costs of a spare room. They receive help towards their housing costs based on the need of their household.

These rules allow 1 bedroom for each person or couple living as part of the household with the following exceptions:

children aged under 16 of the same gender are expected to share

children aged under 10 are expected to share regardless of gender

a disabled tenant or partner who needs a non-resident overnight carer is allowed an extra room

Children who cannot share a bedroom because of a disability or medical condition may be entitled to an extra room. Claimants will need to contact their local authority and will be asked for medical evidence to support their claim.

The rules mean that those tenants whose accommodation is larger than they need may lose part of the money they get towards their housing through Housing Benefit or Universal Credit. Their eligible rent will be reduced by:

Foster carers and armed forces personnel

On 12 March 2013 we clarified how these rules affect foster carers and armed forces personnel.

An additional bedroom is allowed where the claimant or their partner:

is caring for a foster child, or

has been accepted as a foster carer but has no child living with them, as long as the period without a child is no longer than 52 weeks

An additional bedroom is allowed for adult children who are in the armed forces and continue to live with their parents, even when they are deployed on operations. This means that the size criteria does not apply to the room normally occupied by the member of the armed forces.

Direct Payments in the social rented sector

We believe that Universal Credit payments should replicate as far as possible how people are paid when they are in work. We want to see very many more people handle their own benefit and rent payments.

Housing costs within Universal Credit will be paid directly to individuals in the social rented sector, rather than the current system of payments direct to landlords. This will encourage people to manage their own budget in the same way as other households.

The government recognises the importance of stable income from rent for social landlords to support the creation of new homes. We have included safeguards in Universal Credit to help protect landlords’ income.

We have also put in place support mechanisms for tenants who may need help managing their finances.

Direct Payment demonstration projects

We have been working with a number of local authority and housing association partnerships to test changes to the way housing support is paid in the social rented sector. These projects saw some tenants in the social rented sector receiving monthly Housing Benefit payments, paid directly to them for the first time.

The projects ran from June 2012 to December 2013 and:

tested how tenants could manage monthly payments of housing costs ahead of the introduction of Universal Credit from October 2013

looked at the appropriate level of safeguards needed to help protect a landlords’ income if tenants fall behind on their rent

Appendix 4: introducing the Jobseeker’s Allowance Claimant Commitment

This was a supporting detail page of the main policy document.

The Claimant Commitment outlines what job seeking actions a claimant must carry out while receiving Jobseeker’s Allowance (JSA). It emphasises the claimants’ responsibility to do all they can to look for work in return for the support they receive from the state.

What the JSA Claimant Commitment means

When someone makes a new claim for JSA or returns to JSA from the Work Programme they will attend an interview with a work coach. At the interview they will agree a personal plan outlining what the claimant will do as part of their Claimant Commitment to give themselves the best chance of finding work. This could include regular specific tasks and training opportunities.

The work coach will explain the penalties claimants could face for failing to meet their responsibilities to get into work. They will review the plan regularly.

The Claimant Commitment strengthens the ability of Jobcentre Plus staff to support claimants back into work at the earliest opportunity and redefines the relationship between the welfare state and claimants. In return for state support, we expect claimants to do all they can to meet their responsibilities to return to work.

Universal Credit regulations 2013 – set out the main rules for Universal Credit, including entitlement, elements of the award, calculation of income and capital, and claimant responsibilities, and also allow for a benefit cap.

Housing Benefit amendment regulations – introduce a requirement to set a maximum rent in the social rented sector using the local housing allowance size criteria, and also make changes to the time and circumstances in which a case subject to the local housing allowance is reviewed

Council Tax Benefit

Fraud and overpayments

Loss of benefit amendment regulations 2013 – change the reduction applied to some means-tested benefits and to hardship arrangements, and also sets out the ‘serious fraud’ offences which attract an immediate 3 year loss of benefit

Overpayments and recovery regulations 2013 – set out rules for calculating and recovering overpayments of Universal Credit, certain Tax Credits and contribution-based Jobseeker’s Allowance and Employment and Support Allowance

We are committed to supporting disabled people to lead independent and active lives. We started to replace Disability Living Allowance (DLA) for eligible people aged 16 to 64 with Personal Independence Payment (PIP) from 8 April 2013.

PIP helps towards some of the extra costs arising from a long term ill-health condition or disability and is based on how a person’s condition affects them, not the condition they have. It is not means-tested or subject to tax and it is payable to people who are both in and out of work.

What the change means

involves a more objective assessment, with a face-to-face consultation with an independent health professional for most people

includes regular reviews so that individuals continue to get the right support

There are no plans to replace DLA for children under 16 or for DLA recipients who were aged 65 and over on 8 April 2013.

PIP is based on an assessment of individual need. It will not consider what impairment an individual has, labelling them simply on this basis. Instead it will consider how their impairment affects their life, considering their ability to carry out a range of everyday activities.

Information will be gathered from the individual, as well as health, social care and other professionals who work with and support them. Most people will be asked to attend a face-to-face consultation with an independent health professional as part of the assessment process. The health professional will ask questions about the claimant’s circumstances, their health condition or disability and how this affects their daily life.

We call this the ‘reliability criteria’. This concept had always been integral to the department’s proposals for the PIP assessment, but ministers agreed to include it in the regulations to make the policy intent clear in legislation.

We recognise that the reliability criteria are an important protection for claimants. As a result of feedback received during the consultation on the PIP moving around criteria, we will put in place measures to ensure that the reliability criteria are properly and consistently applied as part of the assessment.

Alongside the phased introduction of reassessment activity, we will continue to take new claims for PIP across Great Britain.

We’ll start to ask the majority of existing DLA claimants to claim from later in 2015 and onwards. We will write to individuals in plenty of time and they do not need to contact DWP now. We expect to have contacted everyone who needs to claim PIP by late 2017.

Providing information about PIP

Information for claimants

We have sent information about PIP directly to DLA claimants with the annual DLA uprating letter. We will continue to do this each year until we have reassessed all DLA claimants for PIP.

Information for support organisations and advisers

We have published general information about PIP for support organisations and advisers in the Personal Independence Payment toolkit. This includes fact sheets and copies of PIP forms and letters.

Common questions and misunderstandings

We have published clarification on some common misunderstandings and questions about PIP in the PIP myth buster.

Policy briefing notes

We have published a series of policy briefing notes that set out important elements of policy and strategy relating to PIP and provide greater clarity on our proposals. They are intended to help people understand the Welfare Reform Act 2012 and the regulations.

Guide for assessment providers

PIP statistics

Independent review of PIP assessments

Section 89 of the Welfare Reform Act 2012 commits the Secretary of State for Work and Pensions to publish 2 independent reports on how the PIP assessment is working. The first was due within 2 years of PIP starting in April 2013.

First review – 2014

On 10 April 2014, the Minister of State for Disabled People appointed Paul Gray to lead the first independent review of the PIP assessment. We published Paul Gray’s independent review on 17 December 2014.

Paul Gray ran a call for evidence to inform his review from 23 June 2014 to 5 September 2014.

Year 4 review – 2013

In February 2013 the Secretary of State for Work and Pensions appointed Dr Paul Litchfield to undertake the fourth independent review of the Work Capability Assessment. Dr Litchfield replaced Professor Malcolm Harrington, who carried out the first 3 independent reviews of the Work Capability Assessment.

Interim report on year 1 recommendations

Audio recording pilot

In his year 1 review Professor Harrington recommended that Atos Healthcare pilot the audio recording of face-to-face assessments to see if this approach would be helpful to claimants and improve the quality of assessments. A pilot was undertaken in spring 2011. We published the findings of the audio recording pilot in April 2012.

Evidence based review of the Work Capability Assessment

On 12 December 2013 we published the Evidence based review of the Work Capability Assessment. This is a study to examine the performance of the assessment criteria for Employment and Support Allowance and alternative criteria that were developed by specialist disability representative groups. The study arose from a recommendation in Professor Harrington’s second independent review of the Work Capability Assessment. It looks at the validity and reliability of the assessment criteria.

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